Customer-Integrated Business Models: A Theoretical Framework

Abstract

Over the last few years, firms have involved their customers increasingly in different goods- and services-related processes (design, production, delivery, etc.). A corollary of this trend towards increasing integration of the customer has been new organizational choices aimed at generating higher margins, either by increasing revenues or by reducing costs. In other words, thinking about the ways in which the customer can and should be mobilized has mirrored fundamental changes in business models (BMs). However, the academic literature on the BM concept has remained relatively scarce so far (Demil & Lecocq, 2008). In particular, it seems that no study has thus far tackled the issue of customer participation in the BM. Customer participation has been the focus of much research in the field of services marketing and management. This literature considers the customer as an active player, going beyond traditional perspectives of the customer as a mere buyer Still, the customer’s impact on the firm’s ability to generate revenues, and thus on the firm’s BM, remains unknown. This paper aims to provide a theoretical framework for the way in which firms can and should integrate their customers into their BM. Combining BM and customer participation literatures, we develop a theoretical framework for what we label the “Customer-Integrated Business Model” (CIBM), a generic BM based on customer participation. Our model relies on the RCOV (Resources and Competences, Organization, Value Proposition) of Demil & Lecocq, 2010. In a CIBM, the customer is considered as a resource. This has significant consequences, both on the two other components (Value Proposition and Organization) and on the interrelations between the three parts of the model. We exemplify this theoretical framework with two case studies based on secondary data. We conclude by addressing the potential limitations of CIBM.